China's 'National Team' is doing everything in its power to stop stocks crashing - here's the playbook
The so-called "National Team" is injecting cash into the market after Monday's 7% crash, according to a report by Bloomberg News.
The government is also preparing to extend a ban on short selling - where investors borrow stocks and sell them, pocketing a profit if the price falls - in an effort to keep the stock market bouyant.
The sell-off on Monday saw about $590 billion wiped from Chinese shares, according to the Bloomberg report. The fall was so steep that it triggered a break clause that suspended trade for the day.
Markets reopened on Tuesday and the benchmark Shanghai Composite Index immediately opened 3% lower. But with an hour left to trade, the index is now down around 1.47%.
The reaction of Chinese authorities to the crash is similar to what happened last summer, when shares plunged more than 40% in two separate crashes.
The Chinese state bought shares directly, limited debt-fuelled gambling on the markets and loosened pension policy to allow pension funds to hold more stocks. There were about 40 interventions but only direct buying kept markets up.
Here's the list of policy actions China tried last time. Depending on how things go this year, the government may try a similar scatter-gun approach again: